Yesterday’s signals produced a mildly profitable short trade following the bearish doji candlestick which rejected the resistance level at 1.3053. It is probably a good idea to close any remaining profit out.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be taken between 8am London time and 5pm New York time today.
Long Trade
Go long after the next bullish price action rejection following the next touch of 1.2996.
Put the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Short Trades
Go short after the next strongly bearish price action rejection following the next touch of 1.3053 or 1.3114.
Put the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
USD/CAD Analysis
I wrote yesterday that I thought the next key test was likely to come at 1.3000 and the reaction there should tell us something. I was wrong, the pivotal level was actually the resistance I had identified at 1.3053, the rejection of which produced a few short pips. However, the price is moving little, and this pair has been a sideshow in the Forex market and best avoided. This may well change today as we have key data releases in both currencies. There is a weak long-term bullish trend but a medium-term bearish trend, so this pair is probably best avoided today until it gets some direction from the economic data / central bank releases later.
Concerning the CAD, there will be a release of Core Retail Sales data at 1:30pm London time. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm, followed by the FOMC Meeting Minutes at 7pm.